DUBAI (Zawya Dow Jones)--Rothschild is one of two banks shortlisted to advise Dubai on how to use $10 billion pledged by the Abu Dhabi-based federal government to help the emirate through the economic downturn, according to people familiar with the matter.
The fiercely contested advisory mandate comes as Dubai intensifies its efforts to fend off the global financial crisis and gears its finances to cope with the cost of servicing the near $80 billion of debt racked up by its government and corporate entities.
If appointed, Rothschild will advise the Dubai Department of Finance on its $20 billion bond program launched last month, of which $10 billion was covered by the Central Bank of the United Arab Emirates, a person familiar with the deal told Zawya Dow Jones.
The person, who declined to be identified, said that Dubai's government will formally award the mandate this week to one of the two shortlisted banks. They didn't specify the identity of the other bank competing for the contract. Officials at Dubai government declined to comment.
A spokesperson for Rothschild in Dubai couldn't be reached.
The bank, headed by family patriarch Lord Rothschild, has gained a reputation as a financial fireman of late. It's advising Songbird Estates, the Morgan Stanley-backed group, that owns Canary Wharf in London on the refinance of more than $1.2 billion of debt and also helped the Dutch government with its $13.4 billion bailout of ING.
Dubai's $20 billion bond plan, and the subscription of the U.A.E. central bank to half the amount, followed months of concern that the emirate will struggle to repay its debt amid global financial turmoil.
The emirate's economy, 30% dependent on real estate, has been hit hard by a slowdown and concerns it may struggle to meet it's debt obligations.
-By Mirna Sleiman, Dow Jones Newswires, +9714-364-4966, mirna.sleiman@dowjones.com END
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